HOPE NOW: Loan Mods, Foreclosures Up in 1Q

HOPE NOW reported an increase in loan modifications in the first quarter, but also noted that foreclosure actions increased during the same period.

HOPE NOW, a voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and non-profit counselors of which the Mortgage Bankers Association is a founding member, said 319,000 homeowners received non-foreclosure solutions from mortgage servicers in January, February and March, a 5 percent increase from the fourth quarter (303,000).

The report said permanent loan modifications totaled 86,000, of which 62,000 were proprietary loan modifications and 24,329 were completed under the Home Affordable Modification Program. Formal repayment plans totaled 118,000, with the rest comprising short sales, deeds in lieu and other retention plans and liquidation plans.

HOPE NOW said foreclosure starts totaled 179,000 the first quarter, compared to 156,000 in the fourth quarter, an increase of 14; however, foreclosure starts fell from a year ago (215,000). Foreclosure sales in the first quarter totaled 91,000, compared to 76,000 in the fourth quarter, an increase of 19 percent. From a year ago, foreclosure sales fell by 5 percent (96,000).

Other key data:

–HOPE NOW estimated 86,000 loan modifications completed in the first quarter, compared to 85,000 in the fourth quarter, an increase of 2 percent. Formal repayment plans increased to 118,000 in the first quarter from 112,000 in the fourth quarter, an increase of 6 percent.
–Loan solutions totaled 319,000 in the first quarter, compared to 432,000 a year ago, a decrease of 26 percent.
–Short sales totaled 19,000 in the first quarter vs. 23,000 a year ago, a decline of 19 percent.
–Deeds in lieu totaled 5,300 in the first quarter, compared to 5,800 a year ago, a decline of 9 percent.
–Delinquencies of 60+ days totaled 1.72 million in the first quarter, compared to 1.92 million a year ago, a decline of 11 percent.

For March, alone, mortgage servicers offered 119,000 total solutions, with 32,000 permanent loan modifications completed. Of that total, 24,000 were proprietary loan modifications and 8,551 were completed under HAMP. Total modifications for the month represented an 18 percent increase from February (27,000).

Other March data:
–Foreclosure sales totaled 29,000 vs. 28,000 in February, an increase of 4 percent.
–Foreclosure starts totaled 59,000 vs. 62,000 in February, a decrease of 5 percent.
–Short sales completed totaled 7,500 vs. 5,300 in February, an increase of 40 percent.

The full data set for the first quarter can be found at www.hopenow.com.

“Early intervention and direct contact with the borrower has clearly made a huge impact in the overall delinquency numbers,” said HOPE NOW Executive Director Eric Selk. “Both permanent and short term solutions remain available to those who are struggling with their mortgage.”

Selk said mortgage servicers have remained aggressive in outreach to at-risk borrowers, via face to face events, call centers and improved online technology. “As HAMP sunsets at the end of the year, it is critical for all homeowners who are experiencing difficulty with their mortgage to reach out for assistance,” he said. “With general market recovery and stability over the past year, HOPE NOW is concentrating efforts on streamlining the assistance process for homeowners. We have looked at communication between servicers and homeowners and provided suggestions on improving the customer process. HOPE NOW is also very active in conversations focusing on the loss mitigation world once HAMP expires.”